Facebook (FB) has a lot of things going for it.
And now it has one more.
FB made a lot of news when it purchased virtual reality (VR) headset maker Oculus for $2 billion 2014. Now, FB is making more headlines this week at the massive Consumer Electronics Show in Las Vegas, NV.
On Wednesday, management announced that the Rift headset is going on presale and will be available for shipping on March 28, for a mere $599. It will be available at select retailers in early April.
While FB isn’t the only major tech company to jump into the VR/augmented reality (AR) space — Microsoft (MSFT) will soon launch its AR HoloLens, Google (GOOGL, GOOG) had Glass and soon will have Magic Leap — it’s the first to market.
And, this is a very big market, or at least it will be in the near future.
Estimates for the VR/AR market over the next four years range from a conservative $150 billion to an exuberant $3 trillion. To put that into perspective, the video game industry is worth $93 billion. VR/AR is going to be very disruptive.
Oculus Rift Is the First to Market
All the major players are more interested in the hardware side, rather than the software side, at the moment. Many companies are developing headsets, and there will be a battle for primacy in 2016 and beyond.
It’s interesting to note that FB’s first foray into charging consumers for its goods doesn’t come from its social media sites, but from hardware.
Purchasers of the Rift will receive a carrying case for the headset, an Xbox One controller, an external tracking camera and the new Oculus Remote. They will also receive a copy of the game Lucky’s Tale, and pre-orders will receive EVE: Valkyrie as well.
There may be something to glean from the preorder numbers (if they’re released), but the more interesting test will be how the Rift sells once Microsoft, Samsung, Sony (SNE), and Google devices hit the market.
That will be the true test, since the VR/AR divide will be a major factor in determining the ultimate winners.
VR and AR Technology Is for More Than Just Gaming
What’s the difference? VR is a completely immersive technology. Once you put on the headset, you are in a new, digitally-rendered world. AR, on the other hand, is a digital overlay on top of your good old analog world. In VR, the room you’re in disappears when you put on the headset, but in AR, the room remains with your digital world layered on top of it.
The other aspect of this new VR/AR technology is that these devices will have broad application for a number of uses in industries other than just gaming –flight simulators, virtual surgical training, tourism, athletic training, etc.
Given FB’s vision and its ability to turn those visions into successful products, there’s a very good chance of success for Facebook stock in this sector. Being first out of the gate is a distinct advantage, since FB will have an extra quarter of sales under its belt before the competition launches.
FB stock hasn’t moved on the news, although the television is covered with stories about CES, and the Rift in particular. Now is a good time to pick up shares of Facebook stock.
Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip Growth, Emerging Growth, Ultimate Growth, Family Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.
